UnitedHealth raises full-year profit forecast after earnings beat in third quarter

UnitedHealth $UNH Group reported third-quarter adjusted earnings of $4.69 per share on Tuesday, beating analyst expectations of $4.14 per share, according to CNBC. The company raised its full-year 2026 adjusted earnings outlook to at least $20.50 per share, up from a prior range of $19.50 to $20.00 per share.

Revenue for the quarter ended September 30 came in at $112.7 billion, down from $113.2 billion in the same period a year earlier. The company posted net income of $4.11 billion, or $4.56 per share, a significant improvement from $2.35 billion, or $2.59 per share, a year ago in the third quarter of 2025. Earnings from operations rose to $6.6 billion from $4.3 billion in the year-ago quarter.

The profit gains came as UnitedHealth served fewer people. UnitedHealthcare, the company's insurance unit, covered 48.3 million members in the quarter, down from 50.1 million a year earlier. Medicare Advantage enrollment has contracted by 935,000 since year-end 2025, while Medicaid membership declined by 85,000 in the quarter due to ongoing eligibility changes. The Employer and Individual segment saw 165,000 fewer people served due to employer attrition.

UnitedHealth's medical cost ratio — the share of premiums paid out to cover medical expenses — fell to 88.4% from 89.9% in the third quarter of 2025, the company said. A lower ratio indicates more revenue retained relative to claims paid. The company attributed the improvement to medical cost management, benefit design changes, and pricing discipline. The quarter also included $610 million of net favorable prior-period reserve development.

CFO Wayne DeVeydt said medical costs "continue to be elevated versus historical norms," according to CNBC. He cited the independent dispute resolution process under the No Surprises Act as responsible for adding at least 1 percentage point to overall medical costs, and said inpatient services and specialty pharmacy drugs remain elevated cost areas.

Optum, the company's health services arm, brought in $66.9 billion in revenues with operating earnings of $3.7 billion, against $69.2 billion in revenues and $2.5 billion in operating earnings during the same period last year. Optum Health revenues fell 10% year over year as a result of fewer value-based care patients served, while its operating earnings rose sharply to $735 million from $41 million in the third quarter of 2025.

UnitedHealth raised its full-year profit guidance earlier this year after second-quarter adjusted earnings of $6.38 per share topped analyst expectations of $4.90 per share. At that time, the company lifted its adjusted earnings outlook to $19.50 to $20.00 per share. UnitedHealthcare served 48.5 million people in the second quarter, with Chief Executive Officer Stephen Hemsley pointing to ongoing work to simplify operations and improve affordability.

UnitedHealth stock rose about 3% in premarket trading Tuesday.